At IWCO Direct, it’s our belief that who you speak to is as important as what you say.
While I have addressed it before, when attempting to calculate your return on marketing investment (ROMI), it’s important to consider the role of attribution and the method you use for response and conversion calculation when engaging in a direct marketing campaign. Without appropriate measurement, improvement is next to impossible to achieve. This speaks to the importance of attribution models in marketing.
Marketers create attribution models in order to measure the influence each advertising impression has on a consumer’s decision to buy a product or service. Understanding the contribution of various channels (including search, email, display, etc.) and the conversion path a customer takes allows marketers to understand the impact of changing channel mix or weight. Clients today typically use one of three attribution approaches:
- Single touch attribution: first or last touch;
- Fractional attribution: weights or curve models giving credit to events and touchpoints in the buyer journey at set amounts; or
- Probabilistic attribution: statistical models to derive probability of conversion across all marketing touchpoints.
They then use the results of that analysis to weight the value of each touchpoint preceding the conversion. (Usually, a modeled approach considers both converting and non-converting touchpoints.)
Imagine for a moment that a digital marketer sees a sudden spike in of their AdWords buys and assumes that they have made a more effective keyword selection. Without visibility into the other channels, they are unaware that several million pieces of direct mail dropped into the market, and a larger percentage of branded and non-branded search is resulting from the mail channel.
Getting a More Accurate Picture of Conversions
By utilizing tools such as UTM codes, you can determine the source medium for search traffic before and after the direct mail drop. Further match-back analysis on the exact prospects registering, and comparing them to those receiving the mailpiece, could allow one to see that most of the search conversions are actually mail recipients from the most recent drop. When marketers begin to look at spend, impressions, customer journeys, hold out groups, and tactics, they can begin to get a clearer picture of who is (and who isn’t) responding and converting.
Today’s marketers have a wealth of tools at their disposal to help them achieve success. In past posts, I have discussed each of the following tools at some level:
- Customer journeys;
- Off-the-shelf clustering systems;
- Analytics segmentation and custom clustering systems;
- Demographic profiles;
- Demographic models;
- Response models;
- Conversion models;
- Lifetime Value (LTV) models;
- Measurement tools and methods (match back, like and universal hold outs);
- Attribution methodologies.
The Key Ingredients to Success Haven’t Changed
All of these approaches serve to help marketers be smarter about who they target and when. However, it’s important to remember that all of this will do very little for your marketing success if you do not have a compelling offer in a media channel your target audience is engaged with, at a cost you can afford while still having a profitable ROMI.
At IWCO Direct, we focus on helping our clients get a better ROMI for every dollar spent.
I invite you to weigh in and provide your thoughts. Are you using predictive modeling (response and conversion scoring)? What other methods have you found to be useful in achieving your customer acquisition goals? Are there other methods you would like to learn about or methods that have failed you? Where do you feel the biggest opportunity for improvement in your direct marketing program can be found?
I would love to hear your feedback. Contact me here.
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